Jump to content

Recommended Posts

Thanks SoT for the reminder but i was really interested in what SIR FWIW had to say.

 

I have sent you a PM Sir FitKid!

Share this post


Link to post
Share on other sites
http://www.321gold.com/editorials/thomson_...n_s_120809.html - Gold Battlefield: Think Less. Buy More

Faith-based "investment"? :) [Maybe he means hope less].

 

Buy weakness, sell strength?

 

I guess that is fine for a trader. I don't trade gold [the idea for me is to realize "profit" by accumulating gold ounces], but I would consider trading silver.

 

Buying weakness sounds good, but I'd also keep serious powder in reserve for a possible manic swing in the market.

Share this post


Link to post
Share on other sites

Here is a central bank that is bearish on gold, Korea's central bank sees little reason to buy gold to diversify out of US dollar holdings. They hold the 6th largest foreign reserves.

 

Here is the article from Bloomberg:

 

Bank of Korea Sees ‘Illusion’ in Gold, No Cash Return (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A

By Kim Kyoungwha

 

Dec. 8 (Bloomberg) -- The Bank of Korea, diversifying foreign-exchange reserves away from a falling dollar, said additional gold holdings aren’t attractive as most other central banks aren’t buying and the metal offers no cash returns.

 

“There’s an illusion in gold,” Lee Eung Baek, head of the bank’s reserve-management department, said in an interview. “We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?”

 

Gold surged to a record this month after central banks including India added more of the metal to reserves, while funds and individuals boosted purchases to protect their wealth against the weaker dollar and potential increase in inflation.

 

“Holding gold as part of reserves makes sense in terms of diversification, but I don’t think many central banks want to balloon their holdings with it,” said Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking Corp.

 

Gold for immediate delivery, on course for a ninth annual gain, touched an all-time high of $1,226.56 an ounce on Dec. 3, and has gained 31 percent this year as the dollar has dropped 6.7 percent against a basket of six currencies. The metal traded at $1,153.60 an ounce by 12:37 p.m. in London.

 

South Korea’s reserves -- the world’s sixth-largest after China, Japan, Russia, Taiwan and India -- rose to a record $270.9 billion in November as the central bank intervened in the foreign-exchange market. Central banks intervene by arranging purchases or sales of foreign exchange.

 

‘No Cash Returns’

 

“Like other central banks, we have been increasing the types of currencies consisting of the reserves outside the dollar,” Lee said yesterday by phone, without identifying the currencies. Gold “offers little value,” with “no cash returns,” he said.

 

The Asian nation holds 14.4 metric tons of gold, equivalent to 0.03 percent of total reserves, according to figures from the Bank of Korea. That compares with the average of 10.2 percent held by central banks worldwide, according to data from INTL Commodities DMCC in October.

 

The dollar has weakened this year as the Federal Reserve kept benchmark interest rates near zero percent since December 2008 to revive lending after the worst financial crisis since World War II. Record U.S. government borrowing has also driven investor concern that the currency may be debased.

 

‘Slim Chance’

 

“Since India and Russia with large reserves bought gold, there’s speculation that Korea might buy it too,” Lee said. “But we are not classified in the same category. There’s a slim chance that we will buy gold” from the IMF, he said.

 

Since the end of September, India, Mauritius and Sri Lanka bought more than half of the 403.3 tons of gold that the International Monetary Fund plans to sell to bolster its balance sheet. Bank Rossii, Russia’s central bank, also increased its gold holdings by 2.6 percent in October.

 

Central banks will become net buyers of gold this year for the first time since 1988, according to New York-based researcher CPM Group. Analysts at Societe Generale SA, Barclays Capital and Bank of America Merrill Lynch have forecast more state purchases.

 

“The volatility on gold is too big,” Lee said. “And once gold is purchased, it’s just kept in a safe and is not put up for sale even if prices rise.”

 

Many central banks “remember bullion’s ultra-bearish trend in the nineties,” Sumitomo Mitsui’s Yoshikoshi said. Gold tumbled as low as $251.95 an ounce during the decade, in August 1999. “The recent rally is, for me, too much in an environment where aggravated inflation is hardly expected in the coming years,” he said.

 

South Korea has reduced its holdings of Treasuries to $38.8 billion at the end of September from as high as $72.8 billion in February 2006, according to U.S. Department of Treasury data. This year, its holdings climbed $7.5 billion as the nation’s reserves increased.

 

To contact the reporter on this story: Kyoungwha Kim in Singapore at kkim19@bloomberg.net

 

Last Updated: December 8, 2009 07:57 EST

 

Share this post


Link to post
Share on other sites
“There’s an illusion in gold,” Lee Eung Baek, head of the bank’s reserve-management department, said in an interview. “We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?”

...

“Like other central banks, we have been increasing the types of currencies consisting of the reserves outside the dollar,” Lee said yesterday by phone, without identifying the currencies. Gold “offers little value,” with “no cash returns,” he said.

...

“The volatility on gold is too big,” Lee said. “And once gold is purchased, it’s just kept in a safe and is not put up for sale even if prices rise.”

A pity that Mr. Lee makes such a big fool out of himself.

Share this post


Link to post
Share on other sites

Hi GOM,

 

Agreed I won't be selling anything back to CID either!

 

Hi warpig,

 

plus you have to ship the stuff to Germany if you sell through CID (unless they have changed very recently?)

I only found out when they shipped the wrong silver bars but oiffered to take them back. I would have had no insurance either. When I sell I would never do it by post, that just seems illogical to me. :blink:

Share this post


Link to post
Share on other sites

Anyone any guesstimates on when and where this correction might complete. . .. . . . Dry powder and itchy finger.

Share this post


Link to post
Share on other sites
Hi GOM,

 

Agreed I won't be selling anything back to CID either!

 

This was a reply I got regarding selling back to CID.

 

Finally, regarding the 1oz Silver coins in general, we only deal with the coin from the current year.

 

However, as you might have noticed on our website there are some exceptions like the Australian and China coins as we have enough demand for those.

 

Therefore, the best suggestion we can make you at the moment is to contact us in the moment you would like to sell the 1oz Silver coins as we will be able to make you an offer should we be interested in buying the coins you have to offer.

 

In this email I would like to take the opportunity to also explain the process of selling coins to CoinInvestDirect:

 

* In order to fix the price for each coin you should contact CoinInvestDirect directly and, together with our sales team fix a price which both are confirming on our website. That price will be fixed from that moment onwards.

 

* Following the fixing of the price for each coin we will send you an email confirming the items we are expecting to receive together with their price. Afterwards, we will ask you to send the coins/bullion immediately to our main warehouse in Germany where they will be checked by one of our experts. Postage and risk have to be covered by you.

 

* When sending us the items you should enclose a signed note stating the type of coins/bullion and the quantity you are selling and sending to us. Please also list the previously agreed price per item.

 

* Once we have received the coins/bullion we will confirm receipt and check them within 48h maximum and will then give you feedback.

 

* Upon approval of the coins'/bullion's quality we will arrange for payment to you.

 

* Should the coins not be approved we will send them back to you and no payment will be made. CoinInvestDirect will cover these shipping charges.

Share this post


Link to post
Share on other sites
Bank of Korea sees 'illusion' in gold, no cash return

 

The Bank of Korea, diversifying foreign-exchange reserves away from a falling dollar, said that additional gold holdings aren't attractive as most other central banks aren't buying and the metal offers no cash returns.

"There's an illusion in gold," Lee Eung-baek, head of the bank's reserve-management department, said in an interview. "We follow the big trend. Gold isn't the trend. Out of more than 200 nations, how many countries have bought bullion?"

 

Gold surged to a record this month after central banks including India added more of the metal to reserves, while funds and individuals boosted purchases to protect their wealth against the weaker dollar and potential increase in inflation.

 

"Holding gold as part of reserves makes sense in terms of diversification, but I don't think many central banks want to balloon their holdings with it," said Jerry Yoshikoshi, a senior economist with Sumitomo Mitsui Banking Corp.

 

Gold for immediate delivery, on course for a ninth annual gain, touched an all-time high of $1,226.56 an ounce on Dec. 3, and has gained 32 percent this year as the dollar has dropped 6.9 percent against a basket of six currencies.

 

 

Korea's reserves -- the world's sixth-largest after China, Japan, Russia, Taiwan and India -- rose to a record $270.9 billion in November as the central bank intervened in the foreign-exchange market. Central banks intervene by arranging purchases or sales of foreign exchange.

 

"Like other central banks, we have been increasing the types of currencies consisting of the reserves outside the dollar," Lee said by phone, without identifying the currencies. Gold "offers little value, with ?o cash returns," he said.

 

The Asian nation holds 14.4 metric tons of gold, equivalent to 0.03 percent of total reserves, according to figures from the Bank of Korea. That compares with the average of 10.2 percent held by central banks worldwide, according to data from INTL Commodities DMCC in October.

 

The dollar has weakened this year as the Federal Reserve kept benchmark interest rates near zero percent since December 2008 to revive lending after the worst financial crisis since World War II. Record U.S. government borrowing has also driven investor concern that the currency may be debased.

 

"Since India and Russia with large reserves bought gold, there's speculation that Korea might buy it too," Lee said. "But we are not classified in the same category. There's a slim chance that we will buy gold" from the IMF, he said.

 

Since the end of September, India, Mauritius and Sri Lanka bought more than half of the 403.3 tons of gold that the International Monetary Fund plans to sell to bolster its balance sheet. Bank Rossii, Russia's central bank, also increased its gold holdings by 2.6 percent in October.

 

"The volatility on gold is too big," Lee said. "And once gold is purchased, it's just kept in a safe and is not put up for sale even if prices rise."

 

Many central banks "remember bullion's ultra-bearish trend in the nineties," Sumitomo Mitsui's Yoshikoshi said. Gold tumbled as low as $251.95 an ounce during the decade, in August 1999. "The recent rally is, for me, too much in an environment where aggravated inflation is hardly expected in the coming years," he said.

 

Korea has reduced its holdings of Treasuries to $38.8 billion at the end of September from as high as $72.8 billion in February 2006, according to U.S. Department of Treasury data. This year, its holdings climbed $7.5 billion as the nation's reserves increased.(Bloomberg)

Interesting. Fitkid have you got a link to that? I want to sent it to someone....

Share this post


Link to post
Share on other sites

Gold dealers buy and sell gold at any time at any price, there are quite a few dealers I would talk to before CID. They're great to buy from but I just can't be arsed with sending it to Germany... :)

 

This was a reply I got regarding selling back to CID.

Share this post


Link to post
Share on other sites
“There’s an illusion in gold,” Lee Eung Baek, head of the bank’s reserve-management department, said in an interview. “We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?”

 

 

How many banks? 2 CB's so far. Oviously he has no credibilty when he is idol worshipping his pay masters the US. They will try thier hardest to stop anyone thinking of amending the current economical powers in place.

 

For this exact reason I made my own rebellion against anything is given, issued or otherwise contracted from any bank, etc. They are the number 1 reason for all the problems caused in the world. They helped and facilitated this mania in housing, wars, enviroment etc.

 

Take every single penny that you might own and invest it in honest money just like I did and many others in 2005. STR'd in late 2005 and all 100% of proceeds went into phyical gold and never looked back since.

 

These banks out of thin air produce the same amount of money you, your wife, family, grandfathers back to adam have ever earned in 1 second. In a stroke of a keyboard the deal is done. How evil is that?

 

Hell with banks and the money they produce. This is the least I can do to prove to them that I never cared when I converted everything into honest money.

 

I was probably the main reason of causing the credit crunch when I took all my money out of the system so that this same bank did not lend it to someone or the company that I just got the sack from Muhahahahahaaha and caused this domino effect. Hmmmm it took 2 years to materalise :lol:

 

 

Get used to my spelling mistakes. I do not care.

Share this post


Link to post
Share on other sites
A pity that Mr. Lee makes such a big fool out of himself.

 

“We follow the big trend. Gold isn’t the trend. Out of more than 200 nations, how many countries have bought bullion?”

 

I wonder what Mr. Lee sees as the big trend? It's a pity he doesn't say. The banks with the largest foreign reserves have been buying gold - China, Russia, India.

 

I lived in Korea in 1997-98 during their so called IMF crisis when the won went through a major devaluation. It was common for Koreans to donate their jewellry to the government which was melted down and used to help pay their debts. I wonder if they would hope for a repeat of this if/when they have problems in the future?

Share this post


Link to post
Share on other sites
Take every single penny that you might own and invest it in honest money just like I did and many others in 2005. STR'd in late 2005 and all 100% of proceeds went into phyical gold and never looked back since.

Hey 301er, that was a pretty savvy move to do back in 2005. You must be over the moon with those 301 ounces with the POG today and the potential gains in the near future.

 

When you do decide to 'cash some in' (in say a few years when it is looking toppy) how will you avoind the banks with your returns? Straight into property?

Share this post


Link to post
Share on other sites
How many banks? 2 CB's so far. Oviously he has no credibilty when he is idol worshipping his pay masters the US. They will try thier hardest to stop anyone thinking of amending the current economical powers in place.

 

For this exact reason I made my own rebellion against anything is given, issued or otherwise contracted from any bank, etc. They are the number 1 reason for all the problems caused in the world. They helped and facilitated this mania in housing, wars, enviroment etc.

 

Take every single penny that you might own and invest it in honest money just like I did and many others in 2005. STR'd in late 2005 and all 100% of proceeds went into phyical gold and never looked back since.

 

These banks out of thin air produce the same amount of money you, your wife, family, grandfathers back to adam have ever earned in 1 second. In a stroke of a keyboard the deal is done. How evil is that?

 

Hell with banks and the money they produce. This is the least I can do to prove to them that I never cared when I converted everything into honest money.

 

I was probably the main reason of causing the credit crunch when I took all my money out of the system so that this same bank did not lend it to someone or the company that I just got the sack from Muhahahahahaaha and caused this domino effect. Hmmmm it took 2 years to materalise :lol:

 

 

Get used to my spelling mistakes. I do not care.

Here here! Welcome to GEI club. Did the same thing myself (except for the STR). Great call there. I bought my first ounce in Sep 2007.

Share this post


Link to post
Share on other sites
Why have a national reserve currency at all? Why not have denationalised currencies? Indeed, why not just trade in gold/silver weight - it doesn't need a number attached to it (pound, dollar etc) to measure its worth.

 

The argument for dealing with notes, rather than coins can now be side lined. With mobile phone technology edging ever closer to giving us all a digital wallet (even if most don't realise it yet), why do we need notes or coins at all? All we need to know is that whatever "thing" is backing that digital representation is really there. GoldMoney already have an iPhone applet and I noticed an RBS advert for their new iPhone applet too. How long will it be before people start cutting out the ATMs and EPOS and just swap money via their Internet connected phones?

 

There is no reason for governments to be involved in money and I can imagine a world far less manipulated without them involved. A gram of gold cannot be manipulated and has international value. The same can be said for many other PMs too. All the governments need be involved in is the regulation of the companies holding the PMs, if they are needed at all (private audits are likely enough).

 

I can envisage a future where we can simple swap our e-gold/silver as money. Vaults could be distributed around the world, with PMs delivered on demand. Open, clear and simple. People could even choose to let the "bank" lend out some of their money to others. Fractional reserve lending could work fine too, as long as people are aware of the risk of losing their money (no lending is risk free).

 

Hayek discusses such options here: http://www.iea.org.uk/record.jsp?type=book&ID=431. He takes the idea further of having competing currencies of all sorts of types, all operating outside of government control. Whether "hard" currencies would push out the others would only be known from trying it out, but I think a multi-polar, denationalised money world could work very well.

This is nice in theory. But the reality is whole populations, and countries, have savings [and debts] that are currently denominated in existing currencies. It is these real world circumstances that have governments [and pragmatic economists] attention at the moment. The questions occupying them is how to preserve the value of savings, how to preserve the international trading system, and how to stave of increasing unemployment. In short, how to avoid chaos. I do not see much advantage in governments now taking a laissez faire approach [after meddling for so long] and letting the chips fall... I think they have to do what they can to limit the damage of a global debt deflation.... and then at a later date look at an ideal solution.

 

Hayek is interesting. Yet I wonder if his writing was too pre-occupied with collectivism... and was therefore essentially reactionary. Imo a pragmatic economics should allow the tension between the private and public sphere to exist and not slide completely into collectivist ideology, or for that matter laissez faire free market ideology. I think the other problem with Hayek is he tends to put too much emphasis in the "collective wisdom of the species". A doctrine that has degenerated to the idea that free markets always know best.. and are wisest. I think the "madness of crowd" hypothesis is nearer the mark.

Share this post


Link to post
Share on other sites
Surely gold should be up today what with the perceived risk of sovereign default increasing;

 

From Marketwatch;

 

QUOTE

A day after a warning from Standard & Poor's on Greece, Fitch Ratings followed with a downgrade of Greece to BBB+ from A-, news that sent Greek stocks down by over 4%.

 

Meanwhile Dubai stocks also plummeted as Moody's downgraded all six Dubai government-related issuers.

 

And Moody's didn't ignore the major economies either, saying that the U.S. and Great Britain may test the boundaries of their AAA sovereign ratings due to deteriorating public finances.UNQUOTE

 

 

Does anyone have a comment to make on this, my post was ignored earlier (it was amongst a debate, I think that's why)

 

Aren't people holding gold on concerns of a Sovereign default? Yet when these concerns surface the dollar catches a bid and gold goes down.

 

Perhaps hedge funds would prefer to own treasuries rather than gold if such a scenario develops further? 2, 5, 10 and 30 yr treasuries all up over the last couple of daysQUOTE

 

 

The silence is deafening

Share this post


Link to post
Share on other sites
The silence is deafening

 

All in good time. At the moment it's the rally (?) in the dollar all eyes are on perhaps. Soveriegn debts...later episode?

Share this post


Link to post
Share on other sites
All in good time. At the moment it's the rally (?) in the dollar all eyes are on perhaps. Soveriegn debts...later episode?

 

Given the signs of withdrawal of monetary stimulus in some locations and rising rates, gold was a bit over extended but so far the pull back in Gold is pretty minor.

 

On the other hand Gold responds to inflation fear nicely but say Dubai debt default which is deflationary sends it down pretty quickly also.

 

Yesterday Gold went from 1135.?? to 1130.?? in a fraction of a second. i have never seen it go up or down like that before. I dont think it was Greece either.

 

Meanwhile whatever the cause there remains an awful lot of weakness in inflationary pressures in real economies with more or less zero chance that is going to change for months if not years to come.

Share this post


Link to post
Share on other sites
Surely gold should be up today what with the perceived risk of sovereign default increasing;

 

From Marketwatch;

 

QUOTE

A day after a warning from Standard & Poor's on Greece, Fitch Ratings followed with a downgrade of Greece to BBB+ from A-, news that sent Greek stocks down by over 4%.

 

Meanwhile Dubai stocks also plummeted as Moody's downgraded all six Dubai government-related issuers.

 

And Moody's didn't ignore the major economies either, saying that the U.S. and Great Britain may test the boundaries of their AAA sovereign ratings due to deteriorating public finances.UNQUOTE

 

 

Does anyone have a comment to make on this, my post was ignored earlier (it was amongst a debate, I think that's why)

 

Aren't people holding gold on concerns of a Sovereign default? Yet when these concerns surface the dollar catches a bid and gold goes down.

 

Perhaps hedge funds would prefer to own treasuries rather than gold if such a scenario develops further? 2, 5, 10 and 30 yr treasuries all up over the last couple of daysQUOTE

I don't think people are holding gold for any one particular reason but a multiplicity of ones. Accordingly, no single trade could really upset the price too much.

 

Some consider gold a hedge against inflation... some a hedge against [global] deflation... some a hedge against the debasement of currency....some a hedge against government... some against economic collapse....some against soveriegn default.... some against instability....some a hedge against uncertainty.... and then some just like to buy it as a enchanting distraction from the morbid realities of life. :lol:

 

This mish-mash net of reasons should serve to support the price if gold comes under pressure from one particular quarter. Given the confusion, gold should continue to surprise to both the up and down side.

 

Unless you believe the global economy will be back to normal shortly then gold looks good. I'm reminded of the old cold restless man whose small blanket couldn't quite cover him all at once.

Share this post


Link to post
Share on other sites
The silence is deafening

Dubai + Greece -- do they make a Madoff yet? What are a few billions in today's quadrillion dollar world?

Share this post


Link to post
Share on other sites
I don't think people are holding gold for any one particular reason but a multiplicity of ones. Accordingly, no single trade could really upset the price too much.

 

Some consider gold a hedge against inflation... some a hedge against [global] deflation... some a hedge against the debasement of currency....some a hedge against government... some against economic collapse....some against soveriegn default.... some against instability....some a hedge against uncertainty.... and then some just like to buy it as a enchanting distraction from the morbid realities of life. :lol:

 

This mish-mash net of reasons should serve to support the price if gold comes under pressure from one particular quarter. Given the confusion, gold should continue to surprise to both the up and down side.

 

Unless you believe the global economy will be back to normal shortly then gold looks good. I'm reminded of the old cold restless man whose small blanket couldn't quite cover him all at once.

 

That got me thinking, in all probability foreign sovereign defaults should cause at least temporary rallies in the dollar, and dips in gold, clearly the default to watch for is the US.

 

That would send gold to the stratosphere.

 

Paradoxically though is it not possible that US default will be significantly delayed as a result of capital fleeing relatively weaker sovereign nations following their defaults? Foreign capital fleeing into the dollar and US treasuries, sustaining the US far longer than anyone expects?

Share this post


Link to post
Share on other sites
That got me thinking, in all probability foreign sovereign defaults should cause at least temporary rallies in the dollar, and dips in gold, clearly the default to watch for is the US.

 

That would send gold to the stratosphere.

 

Paradoxically though is it not possible that US default will be significantly delayed as a result of capital fleeing relatively weaker sovereign nations following their defaults? Foreign capital fleeing into the dollar and US treasuries, sustaining the US far longer than anyone expects?

Yes, it really depends on the time frame you want to use. In the short/ medium term capital is likely to flow/fly from the peripheral currencies to the central dollar at times. Dollar spike, gold dip.

 

In the longer term, we could see a partial default in the dollar. I think it is very likely to devalue against gold first... though it could well apreciate against other currencies and assets. Eventually, if trade and currencies are to be stabilized, I think a new formalized monetary system will have to be instituted... only then would the Yuan and Asian currencies appreciate against the dollar representing a partial "default". The US might end up begging for this solution after "paradoxically" being crucified on a strong currency as Japan now is.

Share this post


Link to post
Share on other sites

Came across this on my internet contraption today; a statistical analysis of Silver ETF bar list (not sure if it's been posted already).

 

http://www.nowandfutures.com/d3/SilverETFs_1_PDF.pdf

 

Not sure why they bother anyway, why not use the COMEX and Tokyo contract settling technique and just store ETF certificates of another firm - or is that too obviously self referential?

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×